The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, MARCH 21, 1934. MONETARY CONTROL

Hokitika Guardian, 21 March 1934, Page 4

The Guardian And Evening Star, with which is incorporated the West Coast Times. WEDNESDAY, MARCH 21, 1934. MONETARY CONTROL

.; P* hile monetary control appears to jhe the desire of most countries to j bring about a. stabilisation of juices [ at a payable price, the United States j 'appears to anord the best example of | ivrAit happens when the issue is closely i grappled with. President Roosevelt has been endeavouring to right the ■-hip of State financially igiid so bring a round of prosperity in which all may participate, - A New York banking yjunial points out, however, tliat though in time, economic forces -may be expected to 'accomplish a complete readjustment of prices on the new basis of the devalued dollar, economic ! forces arc very much hampered in ! their influence by tiie new conditions j with which they have to contend. It |is pointed out that nobody, wants to yield to economic fences nowadays. Everybody, every economic group, inj stead of recognising any obligation to I conform to economic forces, is wantI ing to baffle them, control them, and I make its own code, often with little knowledge of the effect of such efforts on the general situation. It can be well understood that in such circumstances the objective primarily in mind is slow of realisation. America is trying to solve the position by an increased supply of dollar's made available by reducing the gold unit. This may have a speculative effect due to the expectation that more business is going to be done, but in-the long run if will have to 'be admitted that nothing affects prices but supply and demand in its practical form—the volume of production and the movement oi products off the markets into consumption. Tlaat is something which devaluation of its own accord cannot do. In the Case of the dairying industry in New Zealand there is an opposite example. The volume cf production is here, but the products are not moving off the market into iconsumption even (at- the present low level of prices, l.t is being borne home

that as far as the main market for butter is concerned, the British trade is over supplied, and the rate of consumption is not great enough to move the surplus off the market and so st-i Dilate prices. Turning again to the case of America, apart from the extra, supply of dollars now created, there is said to be ample credit in the bank reserves for all trade requirements, but the credit has been to 'a great extent dormant. The point is now whether any 'artificial method can galvanise thecredit into' practical use and so assist in delating a wider demand for the goods the country is producing. The

more intimate knowledge that greater

free!it is at dull, may stimulate trade to sonic extent, and there is some Evidence of chat result Happening. But there i.s not any guarantee about the methods, which arc speculative, and may require further support later to keep up the flow. What the world requires is a real and not an artificial trade revival, and the lacking of this great need is the missing link which economists the world over are endeavouring to supply. So far tlie host that can lie devised are carefully thought over palliatives, but the main goal still awaits attainment.